Limited company formation
The first question that needs to be considered is whether or not the business needs to become a limited company. In particular, sole traders may not need company registration. At the formation of a limited company, a business becomes a legal entity separate from the owners and operators, although at least one director must be registered with Companies House. More than one may be required, depending on the type of company under formation, and all companies need to submit a registered address.
Some legal protection applies, should a limited company fail. It is also possible to take action when one company registers or attempts to register a name very similar to an existing one. Taxation also changes. After limited company formation occurs, the business tax system comes into play. In addition to PAYE and payroll matters, vehicles and assets are treated differently. The new company may also be subject to changed VAT conditions.
All companies, regardless of turnover, must keep certain accounting records covering incoming and outgoing monies, assets, loans, profits and loses, and submit them to Companies House annually, although only those with a considerable turnover and/or size need to submit audited records. It’s also necessary to have and to use a company letterhead with certain information on it. This must be used for official correspondence, including orders.
Without question, the easiest way through limited company formation is to get professional help. A company formation agent can sort out the registration itself, and let you know what is legally required of the new company and its director or directors. It is even possible to get a company registered online, through such an agent. The process itself can be very quick, although the first choice of company name may not be available due to the prior registration of a similar one.
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